As demand rises for premium coffee, fears loom over how supply will keep up and the impact it could have on coffee prices. The International Coffee Organisation estimates current production of all coffee is 143 million bags, consumption in 2014 was at 150 million bags and growing.
LONDON, ENGLAND, UK (RECENT – 29 JANUARY, 2016) (REUTERS) – Coffee lovers across the globe could see the price of their favourite cup of premium coffee rise because the supply of speciality beans is struggling to keep up with demand, according to Allegra Strategies, food and drink market analysts based in London.
“There are some worrying concerns at the supply level. Certainly the massive growth of speciality coffee on a world wide basis is increasing at 12-15% worldwide, this is happening all across the globe not just in Britain,” said Jeffrey Young, Managing Director and founder of Allegra Strategies.
The European branded coffee shop market also showed stronger growth in 2015 compared with 2014. The total number of branded outlets is estimated at 19,472 stores, with 1,615 stores added in 2015. This represents growth of 9% per annum, according to Project Café16 Europe, the latest report from Allegra World Coffee Portal.
In Asia, the market also showed solid growth, with the total number of outlets estimated at over 14,300 stores in 2015. 2,040 outlets were opened across the region, representing 14% year-on-year growth in the last 12 months for the same period, according to the same report.
There are other external factors that could further exacerbate the supply chain.
“We’ve got climate change, we’ve also got farmers who have to make economic decisions for their families and farms tend to be very small, there’s very low returns and hence they would perhaps prefer to work or send their children to work in the cities where they can earn more perhaps in the building sector and other parts of economies,” said Young.
Experts say the industry badly needs investment and a new strategy, but that could take years.
“I already watch how many coffees I have a day so yes it would make a big difference,” added Elisa Kaczynska.